Battery connection system leader, leading technology
The company is a leader in lithium battery connection systems. Its main business is R&D, design, production and sales of electrical connection products. The main products are battery connection systems, electronic control busbars and industrial electrical busbars. Battery connection systems are widely used in power batteries and energy storage batteries to achieve signal acquisition and transmission. We expect the global battery connection system market space to exceed 27 billion yuan in 2025, or 31% CAGR in 23-25. The company has leading performance in the hot pressing process route, continues to promote technological innovation, and cooperates closely with major domestic customers. The domestic battery connection system market share reached 12.41% in '22. The electronically controlled busbar business also benefits from the high popularity of new energy vehicles and rapid growth; industrial electric busbars have a rich technical heritage, high-quality customers, stable cooperation, and are expected to grow steadily.
Market: Battery connection systems benefit from the boom in power and energy storage batteries. Battery connection systems are widely used in power batteries and energy storage batteries to achieve signal acquisition and transmission. They are divided into two types of processes: hot pressing and riveting. Among them, the hot pressing process has the advantages of light structure and high integration, which is conducive to improving battery pack assembly efficiency and space utilization. Benefiting from the boom in downstream new energy vehicles, the installed capacity of power batteries is expected to maintain rapid growth, and energy storage batteries are expected to take over and become the driving force for long-term lithium battery growth.
We estimate that the value of a single kWh battery connection system in '22 is about 19 yuan. The global battery connection system market space is expected to exceed 27 billion yuan in 2025, with a CAGR of 31% in 23-25. The market space for NEV power battery connection systems in China is about 12.7 billion yuan, or 30% CAGR in 23-25.
Company: Innovatively launched a battery connection system for the hot press process. The technology is leading. Since its establishment in 2007, the fast discharge company has focused on the composite bus business, and has successively entered the fields of industrial frequency conversion, new energy power generation, and rail transit. In 2017, the company innovatively launched a heat pressing solution for battery connection systems, and entered the supply chain of the lithium battery leader Ningde Era in 2020. In recent years, with the booming development of downstream new energy vehicles, performance has grown rapidly. The company has accumulated rich experience in thermocompression production; continued technological innovation to promote the upgrade of signal acquisition line routing FPC to FFC; cooperated closely with leading downstream customers to actively expand customers such as Guoke Gaoxuan and Honeycomb Energy. The electronic control bus business is mainly used in NEV motor controllers, and also benefits from the high popularity of NEVs. Industrial electrical busbars have a rich technical heritage and are growing steadily.
The overall forward fair value range for 6-12 months after listing may be 46.93-4.751 billion yuan. We expect the company's net profit to be 1.88/198/224 million yuan from 2023 to 2025, respectively. Based on the relative valuation and absolute valuation method, we expect the fair forward valuation of the company 6-12 months after listing to be 46.93-4.751 billion yuan, corresponding net profit PE after withdrawal/ after deduction for 22 years is 30.6-30.9x/30.4-30.8x, and the PE corresponding to the projected PE for 2023 is 25.0-25.3x.
Risk warning: The risk that the estimated valuation level is higher than that of comparable company valuations and industry average valuations, the risk that failure to establish profit forecasting assumptions will affect the company's profit forecast, the risk that failure to establish profit forecasting assumptions will affect the company's valuation conclusions, market competition increases the risk, the risk of high customer concentration and dependence on major customers, and the risk of accounts receivable not being recovered.